Is NanoViricides’ Swine Flu Jump Justified?
NanoViricides, Inc. [[NNVC.OB]] announced that it is developing FluCide, its flagship anti-influenza drug candidate, to work against all influenza types and subtypes. The drug has been shown to be effective against common influenza subtype H1N1, which is behind the current swine flu outbreak in Mexico and around the world. Shares of the company rallied more than 50 percent on the news, but investors should be careful as the drug is still in development.
The U.S. Department of Homeland Security has declared a Swine Flu Emergency earlier this week as the entire world works to come to terms with the disease that has already killed hundreds. Unfortunately, traditional flu vaccines and antiviral strategies have limited benefits due to their specificity. FluCide works by specifically targeting enveloped virus particles and dismantling them, which means it’s more effective against many types of flu strains.
Despite the positive news, NanoViricides’ drugs are far from commercialization. The company’s FluCide product has completed animal safety and efficacy studies, but must still file for and pass the three phases for a New Drug Application with the Food and Drug Administration. This means that the drug could be years away from commercialization and too late to benefit from the swine flu outbreak.
During the latest quarter, NanoViricide reported no revenues and a net loss of $644,504 and $10.58 million accumulated deficit as of the fourth quarter of 2008. The company remains well-capitalized to continue development with $1.93 million in cash and cash equivalents, but will likely need to raise additional funds through debt or equity offerings in the future. This led auditors to include a “going concern” statement in its latest 10-Q filing with the SEC.
In the end, NanoViricides’ products may hold a lot of promise by targeting the flu and other diseases in a new way. It may even be effective against flu strains like the swine flu and bird flu. However, commercialization of these products remains distant, while the drugs also face a harsh FDA approval process in all three stages. As a result, prudent investors may want to leave today’s rally to speculators.
CONTACT: Daniel Minton, Managing Director, 406-862-5400, daniel@accelerize.com